Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

What better way to kick off Public Service Recognition Week than a proposal to cut retirement benefits for current and former federal employees? Before the start of the annual celebration during the first full week of May, Office of Personnel Management Director Jeff Pon sent a letter to House Speaker Paul Ryan outlining the administration’s proposals to cut monthly retirement income for all future federal retirees and to require employees to fund a larger portion of their retirement. The proposals, which mirror requests made in the White House’s fiscal year 2018 budget, are sure further strain to an already frayed relationship between the Trump administration and federal workers. The requested changes would reduce cost-of-living adjustments for current retirees in the Civil Service Retirement System (CSRS), which provides retirement benefits for most federal workers hired before 1984. Such adjustments would also be eliminated for current and future retirees in the Federal...

The Trump administration’s proposal to reform housing programs for the poor, unveiled last week, is just one among its many plans to gut anti-poverty programs, even as its authors bleat platitudes about getting people “back to work.” The proposal from the Department of Housing and Urban Development (HUD), outlined in the 2019 president’s budget, would raise rents on around four million families who receive federal rental assistance. HUD proposes increasing recipients’ rent payments from 30 percent of gross income to 35 percent, and also triples the minimum required rent payment from a $50 cap to about $150. On average, people would see their rents raised by about 44 percent . In addition to forcing people living in poverty to hand over money that’s probably already earmarked for other basic necessities, the administration is moving to allow public housing agencies—a s well as landlords —to implement work requirements on those receiving...

“You’ve got to remember, I’m the only guy in the modern era who didn’t want this job,” Speaker of the House Paul Ryan told Politico Magazine last fall. Nonetheless, Ryan entered the speakership with a clear sense of mission. There were taxes to be cut and safety nets to be slashed. Forced to traverse a chasm between Republicans factions, Ryan considers holding his caucus together in December for the tax overhaul to be the highest point in his speakership. Now, with Ryan’s announced departure, those hoping for a change in the trajectory of the Republican Party to arrive with Ryan’s replacement should brace themselves for disappointment. For the second time in nearly three years, House Majority Leader Kevin McCarthy of California appears to be the odds-on favorite to take the spot as number-one Republican in the House. McCarthy has been at the center of the fights for nearly every major Republican piece of legislation and deregulatory effort...

This past Sunday, with the share buybacks of American corporations at an all-time high, The Washington Post business section ran a major piece documenting buybacks’ rise and giving the arguments for and against the practice. And the arguments for, I’m compelled to say, look mighty flimsy. Those arguments have never been more important, since the Republican tax cut supercharged the irresistible force (greed) that compels CEOs to authorize buybacks—as their pay is commonly linked to the share values that buybacks inflate. And “supercharged” may be understating it: “In February alone,” the Post reported, “U.S. corporations announced a record $150.7 billion in buybacks.” The problem with buybacks—the problem their defenders are obliged to address—is that they simply funnel corporate profits into shareholders' pockets rather than into investment. The defenders’ argument is that once the shareholder gets a hold of that...

In 2017, 27 million families received the Earned Income Tax Credit (EITC), a refundable tax credit available to people with low incomes who work. While the EITC has been described as a subsidy for low-wage employers, the credit still materially puts, on average, $2,445 in the pockets of low-income people. But a new paper from the National Bureau of Economic Research (NBER) finds that EITC claimants who are audited are less likely to claim the credit in the following years. This is particularly significant because House Republicans recently proposed expanding Internal Revenue Service review of EITC returns. The NBER researchers looked at the behavior of taxpayers who received the EITC—both those who were audited (through correspondence audit ) and those who weren’t. Their study found that, after receiving a correspondence audit, people who claimed the EITC in a particular year were 30 percent less likely to claim it the following year. EITC claimants were also 20 percent...